Country treasurer involved in $100m fraud in a “sophisticated criminal scheme” at ABB

Swiss engineering company ABB Ltd has announced that they have uncovered a ‘sophisticated criminal scheme’ in a South Korean subsidiary that led to about $100 million being stolen from the company. “The treasurer of the South Korean subsidiary is suspected of forging documentation and colluding with third parties to steal from the company,” ABB said in a statement.

Reputation impact even more damaging

The Wall Street Journal reports, “In a letter to employees, Chief Executive Ulrich Spiesshofer wrote: “The financial impact of this criminal behavior is one aspect; even more damaging could be the effect this crime will have on the reputation of our ABB.”

Apparently, the suspect, who wasn’t named by the company, went missing on Feb. 7, ABB said. A company spokesman said ABB uncovered the theft on Feb. 9 which is limited to South Korea. It is working with the relevant authorities.

Other fraud uncovered

Separately, ABB have unearthed alleged improper payments following an internal investigation into its past dealings with oil-services provider Unaoil Group which is also subject of other investigations.

Lessons for corporate treasury departments

The key lessons from this case is that fraud can happen anywhere, even in corporate treasury departments. Fraud best practices need to apply to all departments. Remember that according to KPMG survey the profile of a typical fraudster is that they were:

36 to 55 years old

male

an employee of the company

may hold an executive or director level position (over a third did)

colluded with others

motivated by personal gain

see themselves as well respected.

This is confirmed by the Association of Certified Fraud Examiners who describe the Profile of a Fraudster as: 42% employee, 36% manager and 19% owner/executive, see.

CTMfile take: Are you sure your corporate treasury department is safe and secure? What are the reasons why you feel secure? Insecure? Does anyone always work late? Is this a wake-up call for corporate treasury departments world-wide?